Blockchain for Programmatic: Breaking the Speed Barrier

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At MTA, Chitra creates research-based content that reflects the dynamics of the martech industry. She also lends her expertise to help plan and execute diverse campaigns, events & content strategies on the MTA platform, based on unique client needs. With over 15 years of experience in strategic marketing and communications, she has a great grasp on the way marketing professionals approach technology, their need to evolve and transform as marketers in the digital age, and the challenges therein. Specializing in Content Strategy, Digital Marketing and Loyalty Marketing; and having worked on both the marketer and the vendor side, Chitra has a knack for writing about martech in a way that simplifies this complex landscape for the end-reader, while still addressing the depth and layers of the subject. Chitra has studied media and communications at the London School of Economics and Political Science, UK, and worked at blue chip companies including Timken, Tata Sky and Procter & Gamble (P&G).

While no one argues the role Blockchain could play in bringing transparency to the complex adtech landscape, one of the big objections against it is the speed issue. It’s simply not fast enough to handle the millions of transactions- real-time bids- that happen in a millisecond. Well, Ternio claims to have busted that barrier. That got us excited, so we checked it out with Ian Kane, Co-founder of Ternio, in a rapid-fire chat

1. What do you mean by a ‘blockchain-enabled’ programmatic advertising campaign? Where do you fit in?

By Blockchain enabled campaigns, we mean having a blockchain fast enough to support the high QPS of programmatic buying/selling. We will literally write every single purchased ad impression to the blockchain in real time. No other company can do this. Example: Someone executes a campaign in their DSP, DSP is partnered with Ternio, every purchased impression is logged and decentralized for transparency.

We sit on existing ad tech infrastructure. Ternio does not get involved with any of the core competencies of the companies we partner with - ad serving, yield management, data targeting, etc. No one would partner with Ternio if they thought we were a threat to them.

2. You claim your solution is capable of supporting over 1 million transactions per second – yet others reject blockchain because of the limited speed and transaction volume. Why the discrepancy?

Every company building blockchain solutions is using Ethereum or some other framework/method that doesn’t scale. Ethereum, for example, is limited to 20 transactions per second. Ternio has forked a version of Hyperledger plus Stellar to build a proprietary blockchain framework called Lexicon. By heavily modifying this code base, we are able to scale to over 1 million transactions per second, fully on-chain and decentralized.

3. How exactly will Blockchain technology - in simple words- impact ad fraud and the number of unnecessary intermediaries in the ecosystem?

Blockchain brings trust to any trust-less environment by providing a decentralized ledger all parties can verify. This system of checks and balances ensures that every company helping to transact an advertisement keeps watch on the others. Blockchain won’t cut out the intermediary, but rather bring transparency so all parties can make more educated decisions on where their margins are going and who is providing value relative to their cost. Fraud can be combatted through the use of 256-bit encryption, ensuring that only the ad inventory that was intended to be purchased actually is.

4. What exactly will be different in terms of outcome for the brands trying this solution?

No more waste. On average, 50% of ad spend goes to the supply chain. Advertisers know they are wasting budget, they just don’t know where exactly. By bringing transparency to the supply chain, advertisers only spend money with the parties they want. Reducing the waste means that the advertiser gets dramatically better results and the trustworthy companies helping to transact can capture more ad of those ad dollars.

Marc Pritchard of P&G called the ad supply chain, “Murky at best, fraudulent at worst.” The status quo is not sustainable. If we want the broader ecosystem to be around in the foreseeable future, we need to make changes. The alternative is an ad supply chain made up of only Google and Facebook, and nobody wants that.

The pilot with RPM and other agencies will go live in August. This pilot requires integrations from the brand's preferred buying platform as well as major supply sources. All the companies we speak with love the concept as it brings a competitive advantage to their respective businesses. Now it just comes down to getting everyone integrated and in sync.

Execution is key. We work in ad tech, where there are a lot of smoke and mirrors. Overall, blockchain is a lot closer then everyone thinks. Many are resistant to this change as they are thriving in the status quo. In my opinion, in two years it will be irresponsible for any brand not to buy blockchain-verified inventory.

What could go right is better transparency, a much more efficient ad supply chain, a reduction in ad fraud, and daily payments for publishers. Mistakes or problems are a fact of doing business, but we have an extremely talented engineering team that has already done what the ad industry said was impossible. If we’re not making mistakes and breaking things, then we’re not moving fast enough.

More About Ian Kane

With over a decade in digital media, Ian is a business development, sales, and strategy expert, and has worked for both early stage and mature organizations. Ternio is a blockchain company that brings transparency to the digital advertising ecosystem with its Lexicon framework.